The lawsuit, filed last Friday in the Court of Chancery in Wilmington, Del., alleges that Take-Two executives sought to enrich themselves at the expense of shareholders through a compensation agreement, amended in February after EA made a private offer for the company, that could grant them a big pay-out if Take-Two is acquired. The lawsuit names as defendants Take-Two chairman Strauss Zelnick and CEO Benjamin Feder -- both members of the firm, ZelnickMedia Corp., that manages Take-Two. It was filed on behalf of a shareholder, Patrick Solomon, by the law firms Prickett, Jones & Elliott and Schiffrin, Barroway, Topaz & Kessler.

Take-Two said it intends to fight the suit. "We believe that the claims lack merit, and intend to defend vigorously against them," the company said in a statement.

Among its claims, the lawsuit alleges that the increase in ZelnickMedia's compensation in the event of a "change in control" such as an acquisition will impair the company's ability to get a higher price from EA for Take-Two.